AIB is to sell €1bn worth of non-performing loans to to Everyday Finance, an affiliate of Cerberus Capital Management.
Last year, the bank says the loan portfolio incurred a loss of €11m.
Cerberus will pay AIB €800m, which the bank says will be used for "general corporate purposes".
The portfolio is made up of over 2,000 customer loans with the majority being buy-to-let properties.
The sale excludes performing restructured customer loans.
The bank says it is contacting impacted borrowers to inform them that their loans are being transferred.